More appetite for condo units, poll indicates

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Condo investors worried about the future pool of buyers may take heart from a new poll suggesting that Ontarians are willing to take the plunge…and soon.

While most home-buyers would prefer to get their hands on a detached home, rising prices and limited supply are pushing their dreams out of reach.

However, that is good news for some investors as a majority of potential buyers say they would turn to the condo market for their future residential needs.

According to a recent survey on behalf of the Ontario Real Estate Association and The Ontario Home Ownership Index, almost 30 per cent of Ontarian buyers say they would consider condos. This push is naturally being led by potential buyers in the GTA region.

Almost 60 per cent of the 1,080 surveyed who are likely to purchase a home in the next two years say they would look for a detached house.

And despite all of the doom and gloom in the market, a majority of the survey respondents believe conditions are currently favourable to buy property, while most believe the overall state of the province’s economy is good.

However, not everyone is as positive. One in five believe the province’s real estate market is weaker compared to one year ago.

Interestingly, more Ontarians rank long-term investment value as they motivation for buying, followed by affordability/availability with 26 per cent driven by the desire to own their own home.

Rents rise but household incomes remain stagnant

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The average monthly rent for an apartment increased in the most recent quarter to $1,099, up 0.8 percent from the first quarter of this year and up 3.4 percent year over year, according to Reis Inc., a real estate research firm. It marked the 18th consecutive quarter for rent rises at a time when income growth has mostly been stagnant.

All 79 U.S. metro areas that Reis tracks saw an increase in effective rents, with coastal cities posting some of the highest rent growth in the past year. For example, rents rose more than 6 percent in the past year in San Francisco, San Jose, and Seattle, according to Reis. Other metros not usually associated with high rent increases also saw a rise, such as Charleston, S.C., and Nashville, Tenn., which each saw rents increase about 5 percent or more in the past year. “You have definitely seen that recovery now spread to all of the major markets around the country, even if some of them were laggards,” Ryan Severino, an economist at Reis, told The Wall Street Journal. “It’s a very pervasive recovery.” While rents have been rising, household incomes have mostly been stagnant. The median household income in 2012 was $50,017, compared to the 2007 peak of $55,627, according to U.S. Census data. Some relief may be in sight for renters soon. Apartment vacancies in the second quarter were unchanged nationwide at 4.1 percent in the second quarter, which could signal that supply is starting to catch up with demand. The market is expected to add 180,000 multifamily units this year, according to Reis. “We think new supply will self-correct rising rent,” Stephanie Karol, an economist at HIS, told The Wall Street Journal. “It will be a continuous process of easing over the next few years.”.

Implement These Tips To Raise Your Credit Score

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During tough economic times, many people have problems paying their bills on time. Often they end up with credit problems. Fortunately, there are things a person can do to start a credit repair process. Start out by reading the steps in this article to learn the best ways to easily repair your credit.

If you have credit cards with a utilization level over 50%, then pay them down until they are below 50% utilization. Once your balance reaches 50%, your rating starts to really dip. At that point, it is ideal to pay off your cards altogether, but if not, try to spread out the debt.

The key to successful repair of your credit is to know your rights about how your accounts are reported. If you feel that errors have been made in the way an agency has reported to your credit history then it is in your best interest to know your rights and contact these creditors with that information in your toolbox.

To fix bad credit, restrict yourself from borrowing any more money. Ask yourself if you can really afford what you want to buy, and if you really need it. By reducing your unnecessary expenses on a daily basis, you should be able to set enough money aside to pay back your creditors.

When you decide you want to repair your credit, sending out disputes can help take false information off of your reports. If there are several items on your credit report you need to dispute, only do one at a time. Wait a little while before you send the next one. If you send too many at one time the credit bureau may become suspicious and consider your disputes frivolous.

As previously stated, credit problems are a pretty common problem faced by people. Since so many people have had credit problems in the past, there are many proven ways to improve a person's credit rating. Use the great information in this article to begin repairing your credit, quickly and easily.

Get Your Home Mortgage Questions Answered Here

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It can be tough to figure out all the ins and outs of a mortgage. There is tons of information you must understand before your financing is secured. Luckily, this article has information you can use to put you on the correct path.

To make sure that you get the best rate on your mortgage, examine your credit rating report carefully. Lenders will make you an offer based on your credit score, so if there are any problems on your credit report, make sure to resolve them before you shop for a mortgage.

Save enough money to make a down payment. Lenders may accept as little as 3.5% down but try to make a larger down payment. If you put down 20% of your total mortgage, you won't have to pay private mortgage insurance and your payments will be lower. You will also need cash to pay closing costs, application fees and other expenses.

Don't borrow the maximum amount you qualify for. A mortgage lender will show you how much you are qualified for, however, these figures are representative of their own internal model, not exactly on how much you can afford to pay back. Consider your lifestyle, the way your money is spent and the amount you can reasonably afford.

Before applying for a mortgage loan, check your credit score and credit history. Any lender you visit will do this, and by checking on your credit before applying you can see the same information they will see. You can then take the time to clean up any credit problems that might keep you from getting a loan.

After reading the article above, you should feel better about getting a mortgage. Although it may seem daunting at first, never hesitate to look for more information if you need it to understand your mortgage better. If you use this information to add to what you already know, you can be assured of a smooth experience.

What to Do When Your Credit Card Debt Has Been Charged Off

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One of our readers, Ashok, sent us this question:

Sir, I am a credit card defaulter. I changed my address and likelihood of bank finding me is almost zero. But I feel guilty to do this and want to settle my account with bank, However, i am not in a condition to pay the full amount, but would like to get my name written off from bank’s defaulter list. How do I settle my account with bank? What kind of rebate i can expect? Is there any agency to help me out in this?

Thanks for your question Ashok!

You are wise to want to settle the account out for several reasons:

1. Credit card companies employ entire departments of people they call “skip trace”. Which basically means when someone skips out, they harass everyone you know until they find you.
2. The credit card company will keep reporting the debt to all three credit bureaus until they write it off. When they write it off, they will sell your debt to a new collection company, who will also report your debt to all three credit bureaus. When they give up on trying to find you, they will simply sell your debt to another company.
3. If anyone ever does catch up to you, you can expect them to sue you, and garnish your wages.

Now, assuming that they do not ever find you, you will still have to deal with the damage that delinquent account is doing to your credit score. So, you are exactly right to want to make good on the debt. It will begin the process of repairing your credit.

There is one thing you need to be aware of before you begin. Now, I do not know how old your debt is, but I can tell you that if your credit card company has written off your debt already, calling them will “re-open” it, and they will begin collections all over again. This could actually cause you to have multiple negative accounts on your credit report over the same debt – so do a couple of things first.

If you want to make good on your debt what you have to do is pull all three of your credit reports, and find out who currently owns your debt. From that point, you have two options:

1. Call the collection company who owns your debt now, and offer a settlement for a reduced amount.
2. Send a certified letter to the collection company that currently owns the debt telling them that you refuse to deal with anyone but the original owner of the account (the bank that issued the card.) This is your right by law.

There are pros and cons to both of these:

Collection companies are used to making settlements, and they will likely settle for less than your original bank will. However, they may have tacked on quite a few additional fees to your account that would not be charged to you if you deal directly with the bank that gave you the card.

The best way to know if fees have been added is to look at your credit report. Look at the amount your bank charged off, and then compare it to the amount the new collection company says you owe.

Settling the debt with the original bank will look better on your credit score because it will show a paid charge off. If you pay your original bank you can wait a few months, and challenge any negative information on your reports that resulted from the collection companies (not the original bank.)

As far as what kind of a settlement you can expect: it depends on how much you are willing to negotiate. In situations like yours, you should easily be able to cut the total by 50% if you are dealing with a collection company. If you deal with the original bank, upwards of 30% is a reasonable expectation.

As far as organizations that can help, yes, you will get the help you need from a credit counseling agency. Just be careful which one you choose, because not all of them do a good job. They will negotiate with your creditors on your behalf, and get the account settled for you.

Top 10 Tips For Mortgage Borrowers in 2014

The clock is ticking for buyers and homeowners who want to grab a low mortgage rate in 2014. But if you stay on top of your game, keep your finances in order and act quickly, you can still grab attractive mortgage deals.

These 10 mortgage tips can help you with your mortgage decisions in 2014.

1. Document your finances. Lenders will be extra diligent when underwriting home loans in 2014, as new mortgage regulations went into effect in January. The rules put pressure on lenders to verify that borrowers have the ability to repay their loans.

Keep good records of your finances, including bank statements, tax returns, W-2s, investment accounts and any other assets you own. Be ready to explain any unusual deposits to your accounts. Yes, the $500 that Grandma deposited in your account for Christmas could delay your loan closing if you can't prove where the money came from.

2. Lock a rate as soon as you can. Rates will likely climb in 2014 as the Federal Reserve is expected to reduce the pace of the economic stimulus program that has long helped keep rates low. If you are planning to get a mortgage, lock in a rate as soon as you are comfortable with the numbers.

3. Refinance now - if you still can. Many homeowners lost the opportunity to refinance at a lower rate when rates jumped in 2013. But those who are still paying more than 5 percent interest on their home loans might still have an opportunity.

If you think you may be able to save with a refinance, but you are not sure, it doesn't hurt to try. Speak to a loan officer and take a look at the numbers to see if refinancing still makes financial sense for you after you consider how long it will take to break even with the closing costs.

4. Buyers, use your bargaining power. As mortgage rates climbed, lenders lost a big chunk of their refinance business. In 2014, they will turn their attention to homebuyers and will fiercely compete for their business. Buyers should take advantage of bargaining power they gain with that increased competition. Shop around for the best deal and look beyond the interest rate on the loan.

5. Learn your rights as a borrower. Mortgage borrowers will get many new rights as consumers this year when new mortgage rules created by the Consumer Financial Protection Bureau go into effect in 2014. If you run into issues with your mortgage servicer in 2014 or fall behind on your payments, make sure you are aware of your rights and put them to use.

6. Take good care of your credit. It's nearly impossible to get a mortgage without decent credit these days. That will continue to be the case in 2014. If you are planning to get a mortgage, monitor your credit history and score until your loan closes. The best mortgage rates usually go to borrowers with credit scores of 720 or higher. You may still get a mortgage with a score of 680, but lower scores will mean higher rates or higher closing costs.

7. Don't overspend. Lenders don't want to give out loans to borrowers who will have little money left each month after they pay their mortgages and other debt obligations such as credit cards and student loans. If that becomes the case, the lender will tell you that your DTI, or debt-to-income ratio, is too high and you don't qualify for a loan. Try to keep your monthly debt obligations, including your mortgage and property taxes, below 43 percent of your income.

8. Consider alternative mortgage options such as ARMs. Mortgage rates are rising, but there are alternatives to grab a lower rate, depending on your plans.

A homeowner planning to keep a house for seven to 10 years could take advantage of lower mortgage rates by choosing a seven- or 10-year ARM instead of the 30-year traditional fixed-rate mortgage. Rates on adjustable-rate mortgages can be as much as 1 percentage point lower than on fixed-rate loans.

If you are not sure for how long you plan to keep the house, a fixed-rate loan is probably the better choice.

9. Considering an FHA loan? Reconsider. FHA loans have long been popular among first-time homebuyers because they require low down payments and have somewhat less strict underwriting standards than conventional loans. But they come at a price. Mortgage insurance premiums on FHA loans are likely to continue to rise in 2014, and after recent changes, the borrower is now required to pay for mortgage insurance for the life of the loan. Try to qualify for a conventional loan before you apply for an FHA mortgage.

10. Don't panic. Yes, mortgage rates will likely climb in 2014. But don't panic, thinking you have to buy a home now to grab a low rate. If you are shopping for a home, do your best to move quickly, but remember that this is one of the biggest financial decisions of your life. Get your mortgage and buy your home when you feel ready.

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional.

Canada’s New Home Prices See Moderate Gains In December

New home prices in Canada climbed 0.1 percent in December from November, as expected, for an average annual increase in 2013 of 1.8 percent, the slowest since 1999, according to Statistics Canada data released on Thursday.

The monthly advance matched the median forecast in a Reuters poll of analysts and reinforces the view that the country’s housing market is stabilizing after a recent boom.

The closely-watched Toronto-Oshawa region was the top contributor to the monthly advance in the new housing price index with a gain of 0.2 percent in December and of 1.4 percent year-on-year.

Vancouver, another hot market for real estate, saw a 0.1 percent monthly decline in prices and a 1.1 percent decline from a year earlier.

Nationwide, prices rose 1.3 percent in the 12 months to December, down from 1.4 percent in November and the fifth straight month of slowing growth.

Overall, prices were unchanged in 11 metropolitan regions, down in five and up in five.

The Canadian government has intervened in the mortgage market several times since 2008 to cool the sector, and most economists expect a gradual softening rather than a U.S.-style crash.

The new housing price index excludes condominiums, which the government says are a particular cause for concern.

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional.